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Case Code: LDEN125
Case Length: 15 Pages 
Period: 2006-2015    
Pub Date: 2017
Teaching Note: Available
Price: Rs.500
Organization : TOMS Shoes, LLC
Industry : Footwear Industry
Countries : US, Argentina
Themes: Social Entrepreneurship/Corporate Social Responsibility
Case Studies  
Business Strategy
Human Resource Management
IT and Systems
Leadership & Entrepreneurship

The One-For-One Model of TOMS Shoes- Can It Bring about Social Change?

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Mycoskie priced the alpargatas – for men and women – at around US$ 40. He hosted a dinner party and asked his female friends for advice on how to sell the shoes. His friends, who were impressed and excited about the one-for-one concept, not only paid to buy some of the shoes, but also provided names of stores who would be willing to showcase the shoes. He eventually managed to convince a leading retail store called American Rag, Compagnie to carry the shoes in its store. In May 2006, TOMS sold its first pair of shoes....

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Unlike a typical shoe company, TOMS did not spend anything on traditional advertising. Mycoskie said, “For many retailers, their profit margins are low. They spend lots of money on advertising – whether it’s paying celebrities to endorse your product or taking out significant billboards. TOMS doesn’t have any ad spend.” TOMS got loads of free press, which helped it market the shoes and its mission. Mycoskie added, “I do a lot of interviews, magazine photoshoots, those type of things because that doesn’t cost us anything and the readers of those magazines are even more attracted to editorial than advertising.” ..


Over the years, Mycoskie went on to visit several countries including Argentina, South Africa, Guatemala, and Ethiopia to give away the promised shoes. TOMS claimed to put in a lot of effort in selecting communities and individuals who would be a recipient of its shoes. Mycoskie stated that he chose communities that were truly unable to afford shoes and benefited the most due to health, economic, and educational needs. The promised shoes were given away through the partners of TOMS, namely, nonprofits and other public health organizations. Mycoskie believed that TOMS would be able to reach more children through the established organizations. He added, “We partner with organizations that are already in the community, because they really know what the kids need. They tell me what’s working, what they need more help with. When we’re in these countries, we are in the field at least once a day hand-placing shoes on kids’ feet.” ..


In 2011, Mycoskie released his book ‘Start Something That Matters’– chronicling his efforts in setting up TOMS and stories of other social entrepreneurs who had inspired him. The book went on to become a bestseller. Together with the publisher of the book, Mycoskie promised that a child in need would be given a book for every book sold. ..


Industry observers felt that the reason for the success of TOMS Shoes was that people who purchased its shoes saw the benefits that were derived by underprivileged people through their contribution. Deborah Small, a Professor of Marketing and Psychology at Wharton School of the University of Pennsylvania , said, “We know from research that people are most motivated to help when they feel a connection to those whom they’re helping. So if a company is giving 10% for research, it’s hard to feel passionate about that. But if you are putting glasses on a poor child’s face, there is a very direct connection.” Moreover, analysts pointed out that people were more willing to help others if the cost of helping was not too taxing. ..


In August 2014, Mycoskie sold a 50% stake in TOMS to private-equity firm Bain Capital LLC (Bain) for about US$ 300 million to fund the company’s expansion into the US and overseas markets such as Europe and Asia. TOMS was valued at US$ 625 million, including debt. Mycoskie stepped down as CEO of TOMS and Jim Alling was appointed to that position. .


Exhibit I: Information of TOMS on Social Media Websites
Exhibit II: Information on Companies with the One-for-One Model